‘It’s a Generational Opportunity:’ SEC’s Crypto Pivot Could Supercharge Ethereum and DeFi

The US Securities and Exchange Commission (SEC) may be entering a new phase in its approach to digital assets.

This shift may have gone largely unnoticed by the market, according to Matt Hougan, Chief Investment Officer at Bitwise Asset Management.

Market Sleeping On SEC’s Pivot?

In a recent investor note, Hougan pointed to the speech delivered by SEC Chair Paul Atkins at the America First Policy Institute, titled “American Leadership in the Digital Finance Revolution.” Hougan described the document as “the most bullish government document I have read in my entire crypto career.”

The speech outlined a comprehensive agenda, which is referred to as “Project Crypto.” This, according to Hougan, includes a blueprint to modernize digital asset regulation in a way that boosts innovation and positions the United States as a leader in the global crypto economy.

While the broader market has not yet responded, Hougan believes that Atkins’ vision has not been priced into the market. He explained that investors are underestimating how a friendlier SEC stance could catalyze a structural pivot across multiple crypto sectors.

“I’ve studied and written about crypto nonstop for the past eight years. I’ve long been bullish about the future of crypto, and I’ve said that all assets will eventually move over blockchain-based rails. But after reading the speech, I’m realizing I have to think bigger – and move to a faster timeline. If it wasn’t priced in for me, I’m going to guess it wasn’t priced in for others.”

Based on the content of the speech, Hougan identified three key themes poised to benefit:

• Layer 1 smart contract platforms like Ethereum and Solana,
• public trading platforms such as Coinbase and Robinhood, and
• decentralized finance protocols, including Uniswap and Aave.

Hougan warned that the market’s failure to acknowledge this regulatory inflection point could represent a missed opportunity. The exec also noted that such moves have historically resulted in outsized gains across high-beta sectors.

While skepticism remains due to the SEC’s longstanding adversarial stance toward the crypto industry, Hougan’s interpretation of Atkins’ remarks suggests a serious re-evaluation is underway.

Calls For Privacy Protections and DeFi Inclusion

Adding to this regulatory narrative was a noteworthy speech from another SEC official.

Earlier this week, SEC Commissioner Hester Peirce called for stronger protection of financial privacy and crypto users’ rights during a speech at the Science of Blockchain Conference. She criticized the country’s financial system’s surveillance practices, while arguing that the Bank Secrecy Act and tools like the SEC’s Consolidated Audit Trail compromise individual freedom.

Peirce even went on to highlight the benefits of DeFi and privacy-preserving technologies like zero-knowledge proofs. She urged regulators not to criminalize open-source developers or force reporting in peer-to-peer crypto transactions.